Wall St drops after Yellen moves up rate hike

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US stocks fell today after comments from Federal Reserve Chair Janet Yellen raised the possibility of an earlier- than-anticipated increase in interest rates.

The central bank dropped the US unemployment rate as its definitive yardstick for gauging the economy's strength and made clear it would rely on a wide range of measures in deciding when to raise interest rates.

Equities extended declines after Fed Chair Janet Yellen said the "considerable period" between the end of its quantitative easing program, known as QE, and the first rate increase from the central bank could be six months.

With QE forecast to wind down sometime near the end of the year, a six-month lag would move up the timetable for the Fed's first hike, which many market participants had been expecting in the second half of 2015.

The Dow Jones industrial average fell 114.02 points or 0.70 percent, to end at 16,222.17. The S&P 500 slipped 11.48 points or 0.61 percent, to finish at 1,860.77. The Nasdaq Composite dropped 25.711 points or 0.59 percent, to close at 4,307.602.

Meanwhile, European shares held steady, although Italian stocks slipped in strong volumes as Prime Minister Matteo Renzi said the European Union's budget deficit limit of 3 percent of economic output was outdated.

Shares in UK insurers also dropped, hurt by government plans to scrap a requirement that pension savings be used to buy an annuity. Legal & General was down 8.4 percent and Aviva down 5.1 percent after UK finance minister George Osborne announced the plans as part of the UK budget.

Despite the day's dip, the MIB is still up 11 percent in 2014, strongly outpacing the broad FTSEurofirst 300 which is down 0.9 percent year-to-date, as investors bet on recovery from Italy's worst recession in 70 years.